East Africa Portland Cement Company is set to construct a Sh800 million power generation plant that is expected to slash its annual power bill by about Sh500 million.
The four megawatt (MW) power plant will run on waste gases generated by the company’s Athi River factory. Construction is scheduled to start in September and is expected to take one year.
“The new power plant will have a huge impact on our operational costs because its output will translate to about 40 per cent of our current total energy requirements,” said the EAPCC managing director Kephar Tande in an interview.
Between one-fifth and a quarter of the project costs will be funded from internal savings with the rest of the funds coming from commercial loans.
The cement maker also hopes to permanently address the problem of frequent power outages, which have posed major problems at its clinker manufacturing plant, which is sensitive to interruptions in electricity supply.
Portland currently consumes about 13MW of power supplied from the national grid to run its main installations, including a pre-heated kiln with a capacity of 1,700 tonnes per day.
Mr Tande said the new power plant will help stabilise the company’s operations as it eyes expansion of its overall cement production capacity to two million tonnes by 2017 from the present 1.3 million tonnes.
The use of clinker waste gases to generate power has become popular with cement firms especially in Asia and the Middle-East. Japanese cement manufacturers are credited with spearheading this concept, also known as waste heat recovery systems (WHR) in the cement industry.
“Cost management is a key concern for us and energy is an area we intended to accord special attention even as we look to expanding our operations as a company,” Mr Tande said.
He said the company planned to begin procurement for a new clinker plant near Bisil, Kajiado, in September, at an estimated cost of Sh15 billion.
“We hope to conclude the feasibility study on the new clinker plant in Bisil by end of July (next month) and move to the next stage.”
Also on the cards is the construction of a second cement factory in Nooleleshuani area of Kajiado by 2016. The proposed site for the factory is next to the limestone-rich Maasai plains, which are the major source of raw material for the five cement companies based in Athi River.
Kenya’s power shortage has held back industrial expansion for decades despite the availability of huge energy reserves such as wind, coal and geothermal.
The energy sector, though critical in uplifting the country’s development, has registered slow growth in the past due to the high initial capital requirements and inability to mobilise adequate financial resources to undertake massive investment.
Statistics by the Energy ministry, for instance, show that the national peak demand for power as at May 2013 reached 1,347MW, leaving the country only a thin safety margin.
An estimated 17 per cent of power fed to the national grid is lost to transmission leakages. Hydropower accounts for about 60 per cent of total energy output but this falls significantly whenever there are poor rains.